regulation

from https://www.rappler.com

The online platform industry – which is easy to enter, is relatively inexpensive, and is clearly innovative – is simply for now, difficult to regulate

In our view, there is enough ambiguity in the law that allows for a provisional framework in regulating motorcycle taxis. A similar approach was used in dealing with Uber and Grab when they began operating in the Philippines. Even without a law, the LTFRB established a system to regulate Transportation Network Companies (TNCs) and Transportation Network Vehicle Services (TNVS) that continues to be the regulatory framework for that type of service today. The emergence of motorcycle taxis in the past few years has created a lot of debate. Replete with controversies, the motorcycle taxi business has battled car owners and drivers, law enforcers, and regulators. Some argue that it is prohibited by law as Republic Act No. 4136 or the Land and Traffic Code specifically excludes two-wheeled motor vehicles as allowable public transportation; others believe it has become the most viable option for segments of the riding public seeking out a good, reliable, and (relatively) inexpensive transport system.

It is of course urgent for Congress to enact a law on motorcycle taxis. We have had enough experience to come up with good regulations. Although there are currently 9 pending bills in Congress as of this writing, in the meantime, the government must regulate pending legislation.

Regulation absent legislation

As a middle ground for pending legalization of motorcycle taxis, a pilot run was allowed (but limited geographically to Metro Manila and Metro Cebu and extended through March 23, 2020) by the Inter-agency Technical Working Group (TWG) created to monitor the current stream of motorcycle taxi operations. The TWG’s tasks are to set regulatory guidelines to ensure safety and security, ensure compliance of data sharing, general monitoring and evaluation, price regulation, setting of vehicle specifications and operational requirements, and to provide a final report to the DOTr and the House of Representatives, to aid the latter in its future and potential legislative actions. The same TWG, moreover, has now allowed two new players, JoyRide and Move It, to join the current industry player, Angkas.

The regulatory guidelines released last December 19, 2019, is the working document which the pilot run for motorcycle taxis is based on. This document, however, does not contain the ride-capping mechanism imposed by the LTFRB. Section 11 of the document included operational requirements imposed upon the ride-hailing platforms. It included that (1) all bookings shall only be made within and via the app platform; (2) accident insurance should be secured on par with or above Passenger Personal Accident Insurance Program (PPAIP) rates; (3) a comprehensive safety campaign should be conducted for the public so that all passengers become knowledgeable; (4) existing motorcycle units with OR/CR as of December1, 2019 shall be allowed to be included in the pilot implementation; and (5) “one motorcycle-one rider” must strictly be observed in the implementation. Participating Riders shall be registered to one ride hailing platform only. The last statement is deemed problematic.

Competition vis-à-vis regulation

The new and current players are capped at 39,000 registered bikers – or a limit of about 10,000 bikers per transport network company (TNC) in Metro Manila and 3,000 in Metro Cebu. Angkas strongly opposed this cap as their registration is at the 27,000-mark as of late December 2019. Thus, to impose the price cap means 17,000 of its riders can lose their means of livelihood. As a remedy, it has asked the Mandaluyong City Regional Trial Court to issue a temporary restraining order against the policy. This was granted as the court had said that the policy “puts a cap on the number of bikers that Angkas is entitled to” and enjoined the respondents “from performing any act that limits and impairs their rights to deal with and continue with their contracts with Angkas.” This TRO was only valid for 72 hours.

In a similar fashion, the Philippine Competition Commission (PCC) has, through one of its commissioners, stated that “forcing Angkas to displace 17,000 riders will take away what was rightfully obtained by the company” and appealed to the LTFRB to consider other solutions such as to allow riders to use more than one ride-hailing app.

It is in this very precept that the entry cap imposed shows that the LTFRB regulation is anti-competitive. The regulator’s perspective in this regard,looks to defend its policy of preventing Angkas from becoming monopolistic in nature. However, anti-competitive conduct does not rely solely on how big or how dominant a particular business/company has become; but rather also looks at the interplay of other factors surrounding the circumstances of the industry. Competition authorities all over the world have allowed individual riders/drivers multiple registration in the different ride-hailing platforms (driver/operator non-exclusivity clause) as a solution for competition rather than to restrict. A fundamental concept of competition, after all, is not to restrict entry but to open the market as freely as possible to allow small and big players alike to participate in the market.

It can be conceded that anti-competitive conduct may be affected when unfair individual fare pricing affects the industry as a whole. As an illustration, surge pricing has been disallowed and specifically included in the regulatory guidelines of the LTFRB. This also makes fare prices fixed a justified regulatory intervention. Likewise, it is also not a displaced fear that Angkas might take control because of its first-mover advantage and more commercially popular reputation in the motorcycle taxi market, which can greatly affect consumer welfare in the long term. Look at how Grab has emerged in the TNC market.

Moreover, the ongoing debate on the seemingly overlapping competition and regulatory issue does not end today. In fact, in many parts of the world, the ride-hailing platforms and similar digital platforms which disrupt different sectors (not limited to transportation alone), are being declared illegal due to industry concerns of “virtual monopoly,” tax arbitrage, surge pricing violations, and labor issues. Some of these issues are not even anti-competitive conduct per se but can be considered more as regulatory setbacks.

We stop at this rider cap issue for now but there lies the bigger problem we might face in the next few years. The online platform industry – which is easy to enter, is relatively inexpensive, and is clearly innovative – is simply for now, difficult to regulate. Joseph Schumpeter is right to think of “creative destruction.” That is precisely what ride hailing platforms has become in the transport industry. Now transportation has to battle the bigger issue of safety and mobility. Do ride-hailing platforms for motorcycles, specifically provide safe mobility for people?

There is a clear pathway so that motorcycle taxis can be mainstreamed into our public transport system

The poor mass transportation system in the Philippines has brought about evident consequences to the traffic and commute situation in the Philippines. This is exacerbated by the car-riding culture that has been inculcated because of the sheer lack (or absence) of proper safe systems for pedestrians and commuters. A safe system does not only include the infrastructure of trains, buses, jeepneys, etc, or the physical infrastructure of roads and engineering systems, but includes the whole spectrum of pedestrian walkways, measured distances of public transport stops, road signs, information mechanisms for traffic flow, and sound policy of implementation and enforcement (see the failure of the PUV modernization policy). This deficiency in a safe system approach to transport has birthed the demand for an alternative form of transportation, that is, motorcycles; and corollarily, as a form of public transport, in the guise of motorcycle taxis.

Globally, the World Health Organization (WHO) has reported evidence that motorcyclists are among the most vulnerable road users (VRUs), along with the pedestrians and cyclists. More than half (54%) of all road traffic deaths are among these VRUs. These vehicles are a significant contributor to deaths and injuries by reason of their large number on the roads, their sharing of the roads with bigger vehicles such as cars and buses, and their innate vulnerability for crash impacts because of the absence of a protective shell present in other types of vehicles. This vulnerability is further augmented by the behaviour of riders on the road such as “zigzagging,” lane filtering, and other unique capacities of motorcycling on the roads. Thus, in the Philippine context, where motorcycles are voluminous, the question of safety when riding a motorcycle is addressed through the enactment of a Helmet Law which imposes to all motorcycle riders the use of helmets.

If in such a case that motorcycle taxis are legalized, there is a higher degree of diligence to be imposed upon public transportation vehicles or “common carriers,” that is, the care required is that of extraordinary diligence. This can prove to bring about implementation problems for it requires an effective and truly working safe system – from the provision of proper exclusive motorcycle lanes, enforcement of traffic laws and regulations, up to par safe specifications for the motorcycles, full compliance of helmet use and safety standards, ready emergency response, and proper training and behaviour of both riders and its passengers. This must go hand-in-hand with educating riders and passengers alike of the recommended behaviour on the roads while aboard a motorcycle and a provision for proper feedback mechanism to improve deficiencies and insufficiencies. Because apart from mobility itself, it is the government’s duty to protect its citizens to be safe at all times.

Motorcycle taxi riders often view motorcycles as a more convenient form of transportation because they are allowed to reach their destination on time beating traffic and are cheaper than taking a cab or Grab (making it more embraceable to the riding masses). Motorcycle taxis also allow riders to be transported to bus, train, or jeepney stops more conveniently and “safely,” as pedestrian accommodations are not always friendly. This unfriendliness has been a result of poor urban and transport planning over the years. Mobility then comes in but admittedly works better if safety is its partner. It can also be argued that making motorcycle taxis legal now is just a band-aid solution to the problem of public transportation, where mass transport is, in the long-term, more reliable and efficient for it transports more people to their destination, rather than a one-to-one correspondence which can be considered more costly in the long-run. This does not equate simply in the monetary costs but also in the lives lost (road crashes and vulnerability) and health impacts (pollution) because of unsafe conditions.

Motorcycle taxis are inexpensive for both the riders and the riding public. Motorcycles allow for personal mobility for countries with smaller per capita purchasing power (as in the Philippine case). It is also fuel-efficient, with an average consumption of 60 kilometers per liter of gasoline and leave less carbon footprint. In the current state of the country where income has not caught up with inflation, cheap is a necessary public good. Motorcycles also allow for faster travel time because of their ability to split lanes and go through narrower spaces beating traffic in record time and reduces risks of losses in terms of income and productivity.

These pros must be weighed on the balance with its cons. The second-largest affected vehicle classification of road crash incidents is the motorcycle class second to cars. While Helmets help reduce deaths and injuries, they are merely secondary safety devices which are used to prevent injuries from worsening. Other road practices must still be properly observed by the motorist. There is also the issue of road security. Absent proper identifying marks such as operator helmets, jackets, or vests, colorum motorcycle taxis may be mistaken as “riding-in-tandem” or motorcycling-riding suspects capable of committing crimes on the road.

Inclusive mobility as the solution

This debate cannot end unless citizens see a real solution for transport. For ordinary Filipinos, the motorcycle is a cheap and fast form of transport. For car users, motorcycles can disrupt traffic flow in the roads because of their lane splitting and filtering between other vehicles. In this light, the main issues to consider are (1) road crashes which continue to increase (and will continue to increase as volume increases); and (2) traffic violations which need to be enforced better because motorcycles are subjected to same traffic laws and regulations (e.g., speed, helmet use, distracted driving, drunk-driving, overtaking, lane splitting, lane filtering, etc). Violation of some of these rules has been one of the primary advantages of motorcycles – for its ability to facilitate faster mobility and avoid the traffic congestion. Lane splitting, however, has proved to have other benefits. Motorcycles’ lane splitting has removed commuters from cars, faster travel time through utilisation of road space, and improves fuel efficiency even in extreme weather.

Therefore, in the interim, as we wait for the promise of mass transport and proper infrastructure that can ease our daily commute and make inclusive mobility a reality, the legalization of motorcycle taxis is a pathway forward. We would even argue that for some routes and segments of society, motorcycle taxis will always be a better option.

We are however for strong regulatory framework that ensures that national laws (e.g., Land Transportation and Traffic Code, Motorcycle Helmet Act), LTO and LTFRB regulations, and local ordinances are consistent with each other – taking into account geographical and cultural characteristics of cities and municipalities; an aim for a synergy of laws through the consideration of social circumstances, security risks, and economic impacts (fares, productivity, mobility, etc). There must be better infrastructure in terms of providing proper motorcycle lanes (where motorcycles do not merge with other vehicles, especially bulkier ones) and an effective oversight arrangement for registration, monitoring, control of vehicle fleet, and safety standards for roads and products. Finally, a stronger enforcement of existing laws and regulations (e.g., provision of CCTV cameras, road warnings and signages, etc.); and training programs directed at behavioral change in motorists and enforcers are essentials for such a framework.

It goes without saying that whether it is cars or motorcycles, environmental considerations must be prioritized.

There is a clear pathway so that motorcycle taxis can be mainstreamed into our public transport system. For that to happen, society must have a consensus on inclusive mobility which Congress must legislate and the executive branch implement.